How British Airways made money from IT

Give a man a fish, the proverb goes, you feed him for a day; teach a man to fish, you feed him for a lifetime. Turns out there's a quasi-corollary for corporate IT: Give your company a more efficient system, and you cut costs; give your industry a better way to operate, and you increase revenue.

British Airways (BA) was searching for an integrated system to replace the patchwork of legacy maintenance, repair and operations (MRO) applications supporting its massive engineering department. Through that process, the $12 billion airline discovered a solution that could also enable it to grow and create a new line of IT revenue. "These 60-plus systems had been built up over many years-since IT was first applied to airlines," explains Paul Coby, BA's former CIO and head of shared services (he left the company last month). "They were fit for purpose, but they were linked by legacy connections that were not easy to change and restricted our ability to improve business processes."

In 2006, the airline adopted SAP's MRO solution, customizing the software to support the comprehensive engineering and maintenance requirements of a global carrier like BA. IT also configured the system to support engineering processes end-to-end, from the purchase of critical parts from suppliers to the line maintenance done on aircraft at the terminals and everything in between.

"It moved us from the last century in terms of real process control," says Coby. "Instead of having a whole set of linked systems, there's just one workflow." The key was not just introducing a "really good integrated system," Coby says, but working side-by-side with engineering to figure out how to use it most effectively.

In January 2008, Coby brought BA's longstanding offshore outsourcing provider, Tata Consultancy Services (TCS), on board to support the MRO system and make it easier to implement and use. The resulting system and processes increased efficiency, cut costs, enabled inventory optimization and reduced headcount.

Several years in, they realized they might have a money-making proposition on their hands. "It's not just the SAP software. It's an engineering MRO system that has been implemented on most aircraft types and end-to-end processes that've been well proven by several years of use in front-line engineering," says Coby. "We began to think about how we could take the breadth and depth of how British Airways uses this system and the in-depth support and understanding of TCS and turn this into an attractive, fully supported commercial proposition."

The new system is now bolstering BA's third-party engineering business, which provides maintenance services to other airlines. TCS has rolled out a pre-configured, modular version of the system called Swift MRO that it is selling to other airlines. In addition to the software and support, customers can opt to train employees alongside experienced BA users at the company's Heathrow headquarters. Though the commercial terms are confidential, BA, TCS and SAP will reap the benefits if sales take off. Coby will only say all three companies have incentives to make sure that happens.

"In the field of engineering and safety, [airlines are] not competitors. We're partners. It's in our and our customers' interests to make sure this is adopted," says Coby.

Stephanie Overby is a freelance writer based in Massachusetts.

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